Top tech stocks not big R&D spenders, surprising study shows

By | July 7, 2014

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Contrary to popular belief, high levels of research and development spending in the tech sector do not correlate with superior stock performance, a new study by Bernstein Research shows. “Our analysis of large-cap technology stocks (market cap greater than $2 billion) indicates that higher R&D spend as a percentage of sales does not lead to superior stock returns,” Bernstein analyst Toni Sacconaghi said in a research note Monday. “In fact, the stocks of technology companies in the lowest third of R&D spend have outperformed companies in the highest third over one-, three-, five- and 10-year periods since 1977, with a five-year average outperformance differential of nearly 800 (basis points).”   Scalper1 News

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